SCHOOL'S PLAN FOR AN ANNEX STIRS A DISPUTE ON EAST SIDE

By DAVID W. DUNLAP

Published: April 20, 1987

A legal battle is being waged that could have a major impact on how community facilities - schools, churches and doctors' offices - are built in New York City's residential neighborhoods.

The dispute turns on whether such buildings are properly exempt from certain zoning rules or whether, instead, they ought to undergo a public review of their impact on traffic congestion, property values, municipal services and overall development.

The battle began with neighbors who wanted to stop the Allen-Stevenson School from building a one-story addition in the rear yard of its rowhouse at 128 East 78th Street. They hoped to spare the London plane, ailanthus, willow and apple trees that the new classroom would replace.

The neighbors lost the trees, but they have won a preliminary injunction against the school's plans from Justice Harold Baer Jr. of State Supreme Court in Manhattan. Many Additions Built

He questioned the validity of an exemption in the zoning law that would allow the private boys' school to build in its rear yard, something that a private homeowner cannot do.

The Buildings Department estimates that hundreds, if not thousands, of rear-yard additions, many of them doctors' offices, have been built in the last 25 years under the community-facility exemption. No special permit or review is now required, provided that the building is no taller than one story or 23 feet.

However, in a decision handed down March 16, Justice Baer declared, ''There must be some review of the impact the School's plans will have on the community prior to construction.'' He said he would conduct a review on June 2. Both New York City and the school are challenging his decision.

Justice Baer relied on criteria that he said had been established by the State Court of Appeals in a recent ruling. Last December, the state's highest court upheld the power of the City of Ithaca to issue or deny a special zoning permit to Cornell University. Baer Cites Ruling

Justice Baer cited several findings made by the Court of Appeals in that case:

''There is simply no conclusive presumption that any religious or educational use automatically outweighs its ill effects. The presumed beneficial effect may be rebutted with evidence of a significant impact on traffic congestion, property values, municipal services and the like.

''A special permit may be required and reasonable conditions directly related to the public's health, safety and welfare may be imposed to the same extent that they may be imposed on noneducational applicants.''

The director of planning and development for the City of Ithaca, H. Matthys Van Cort, said, ''This was the first case in New York State where a court said that a community can assess the affect on health, safety and welfare and that it can approve, modify or reject a special permit based on those criteria.''

In an interview yesterday, Justice Baer said about the Cornell decision: ''The burden is still clearly on the objector to show that this will have a deleterious effect on the welfare of the community. But with that caveat, it seemed reasonably clear and reasonably significant.''

The assistant chief of administrative law in the city's Law Department, Albert Fredericks, said that if the Cornell decision were broadly interpreted, ''it would have a tremendous impact on all types of community, educational and religious establishments.''

However, Mr. Fredericks said that he interpreted the Cornell decision to mean that a special zoning permit ''was a reasonable way to deal with the problem,'' not that ''balancing had to be done in individual cases all the time.'' He said the city, a co-defendant in the Allen-Stevenson case, would appeal. Coalition Organized

Meanwhile, back on the Upper East Side, Katrina Maxtone-Graham is pleased by the way things are turning out. She lives at 126 East 78th Street and her garden - which has two small apple trees and a tall ailanthus -shares a wall with the Allen-Stevenson School.

Ms. Maxtone-Graham sued the city and school last October, eight days before the trees next door were sawed down. She organized neighbors in a ''Save the Gardens'' coalition, protesting the loss of an ''oasis'' in the middle of the block between Lexington and Park Avenues.

Her lawyer, Michael S. Gruen, said, ''It's an important case in clarifying that community facilities don't have the right to destroy neighborhoods just because they have status as community facilities.''

But Desmond Cole, headmaster at the 104-year-old elementary school, said that there were no ''grandiose plans.'' Rather, he said, Allen-Stevenson needed the space to establish a ''beginners' class'' for 5-year-old boys who are not yet mature enough or otherwise ready to join the first grade.

''This is not a plan for expansion,'' Mr. Cole said. ''This is a modest little tack-on. The school would build a shed with a sloped roof so we should interfere as little as possible with our neighbor's garden. We have really tried to be accommodating.''